What Property Can Be Distributed Under A Separate Writing

PROBATE CORNER

By: David M. Garten, Esq.

ARTICLE:  What Property Can Be Distributed Under A Separate Writing

In 1974, the Florida legislature originally adopted language from UPC §2-513 that explicitly excluded “money, evidences of indebtedness, documents of title, securities, and property used in trade or business” from a devise by a separate writing. In 2001, the legislature amended §732.515 without adding a statutory definition of “tangible personal property”.  The current statute provides that a decedent can use a separate writing to “dispose of items of tangible personal property, other than property used in trade or business, not otherwise specifically disposed of by the will.”

Tangible personal property:  In Florida, there is no definition of tangible personal property in the estate/trust context. However, Washington State’s definition is consistent with the definition used by the majority of states and Florida generally. The Code defines “tangible personal property” as: “articles of personal or household use or ornament, for example, furniture, furnishings, automobiles, boats, airplanes, and jewelry, as well as precious metals in any tangible form, for example, bullion or coins. The term includes articles even if held for investment purposes and encompasses tangible property that is not real property. The term does not include mobile homes or intangible property, for example, money that is normal currency or normal legal tender, evidences of indebtedness, bank accounts or other monetary deposits, documents of title, or securities.” See Wash. Rev. Code §11.12.260(4) Separate writing may direct disposition of tangible personal property — Requirements.

Intangible personal property: Pursuant to §198.01(11), F.S. (Estate Taxes), the term “intangible personal property” is defined as: “incorporeal personal property including deposits in banks, negotiable instruments, mortgages, debts, receivables, shares of stock, bonds, notes, credits, evidences of an interest in property, evidences of debt and choses in action generally.”

What can/cannot be distributed under a separate writing?

• Animals, such as pets and livestock, are considered tangible personal property. See Karin Prangley, ABA Joint Fall Tax & RPTE Meeting, September 24-26, 2009, Disposition of Tangible Personal Property: Estate Planning Considerations.
• “Personal effects” or “personal property” may include tangible personal property. See Sandy v. Mouhot, 438 N.E.2d 117 (1982). See also In Re Horne’s Estate, 171 So.2d 14 (Fla. 2d DCA 1965) wherein the court held that the “words ‘personal effects’ or ‘personal property’ when used in a will have no fixed meaning and there ‘is always a question of the intention of the testator so ascertained from the particular setting in which the phrase appears and the general tenor of the will.’ Although the term ‘personal property’ is sufficiently broad in its technical sense to include all forms of property other than interests in land, ‘in the majority of cases’ the courts view the intention of the testator as carrying a restricted meaning not including various species of intangible personalty.”
• Cash and stocks held in certificate form are not considered tangible personal property. See UPC §2-513; 63 Am. Jur. 2d, Property, §22. See also Baldwin v. Estate of Winters, 944 So. 2d 437 (Fla. 4th DCA 2006) wherein the court held that a handwritten note stating that the decedent would like one of the personal representatives “to give Allan a new car from” her estate (Allan requested $50,000 to buy a Mercedes), was a devise of a monetary amount that cannot be effectuated through a separate writing.
• A gift of a container (i.e., safe deposit box, safe, or desk drawer) or the contents of a container usually include all of the property located inside the container, including intangibles. See What Passes Under Legacy of Bequest of Things Found or Contained in Particular Place or Container, 5 A.L.R. 3d 466, 528. But see Souder v. Johnson, 501 So. 2d 745 (Fla. 4^th DCA 1987) (When used in its ordinary sense, the phrase “contents of a home” designates those items of tangible personal property which convert an empty building into a habitable dwelling. Such a construction would suppose the inclusion of furniture, fixtures, floor coverings, electrical appliances, pictures, articles of decoration, linens, kitchen appliances, silverware, house and gardening tools, garden furniture and other articles of similar character commonly used to maintain a home. It would not include intangible personal property.); Davis v. Shanks, 911 S.W.2d 390 (Tx. App. 1994) (same); In re Estate of Shoptaugh, 482 N.E.2d 1142 (Ind. App.1985) (stating “general rule” that the term “contents” does not refer to intangible property such as stocks)
• Precious Metals. In Florida, it is undecided whether bullion or coins that are not commonly used as currency may constitute tangible personal property. See The Florida Bar Real Property, Probate and Trust Law Section Probate Law and Procedure Committee Coins and Bullion Subcommittee White Paper Proposed Revisions to 731.201, F.S. (2019). Compare In re Macfarlane’s Estate, 459 A.2d 1289 (Pa. Super. Ct. 1983) wherin the court held that because gold and silver coins have both intrinsic and marketable value in and of themselves, they cannot be considered intangible property, without more. The coins are more than the mere representation or evidence of value, as opposed to stock certificates or paper currency. See also In re Estate of Lowe, 191 Wn. App. 216, 361 P.3d 789 (Wash. App. 2015). In Lowe, the issue was whether precious metals, such as bullion or coins, can pass by separate writing. The court reasoned that “Currency” is defined as “[a]n item (such as a coin, government note, or banknote) that circulates as a medium of exchange.” BLACK’S LAW DICTIONARY 465 (10th ed. 2014). Similarly, “legal tender” is “[t]he money (bills and coins) approved in a country for the payment of debts, the purchase of goods, and other exchanges for value.” Both definitions describe bills or coins presently used to purchase items of value. In contrast, precious metals, such as bullion or coins, are often kept either for their sentimental value or for investment purposes, and the value varies based on the prevailing prices on the precious metals market. The court concluded that because the decedent paid a premium for the silver coins in anticipation of greater worth in time, the coins were best classified as precious coins rather than normal currency; therefore, the coins were tangible personal property rather than intangible currency.